Interim Management Statement

RNS Number : 3177F

Rotork PLC

21 April 2011

 

21 April 2011

Rotork p.l.c

Interim Management Statement

Rotork p.l.c, the market leading actuator manufacturer, is today publishing its first Interim Management Statement for 2011 covering the period from 1 January to 21 April 2011.

The year has started well and we are pleased to report record order intake in the first quarter of £108m, 18% ahead of the prior year. Shipments are slightly down on the prior year due to the timing of delivery requests by our customers. We are anticipating a stronger second half performance than the first half as these projects are delivered. The strong order intake and level of shipments has resulted in a Group order book of £153m, 10% higher than the year end and 18% ahead of the same point last year. 

We anticipate the first half results will show margins slightly lower than the prior year, reflecting our continued investment in the business for growth and higher raw material costs. In Rotork Fluid Systems, margins in the first half will show a reduction, although this is expected to reverse in the second half. Management remains focused on mitigating the effect of higher raw material costs through sourcing initiatives. Overall, we anticipate Group margins for the full year will be similar to the prior year.

The market in Japan has already started to return and we are supporting our Japanese customers in repairing and replacing damaged equipment. A number of nuclear power projects have been delayed while governments assess the risks. However, we expect the investment in this market to return in the medium to long term with increased maintenance activity in the short term.

Rotork Controls

Our electric actuator division has seen strong demand across all sectors and geographies. Our focus on innovation and customer service provides a solid base to benefit from the increased activity in the markets we serve. China and India have had a strong start to the year and we have already started to benefit from the increased investment in the Indian market. Rotork Process Controls continues to develop its product offering and we are seeing an increase in activity throughout our sales offices.

Rotork Fluid Systems

Our pneumatic and hydraulic actuator division has seen the greatest increase in order intake, 29% up on the first quarter of last year. We have seen increased demand for actuators used on emergency shutdown systems and investment in oil and gas infrastructure remains strong. The continued development of our international presence including recent acquisitions and new offices in India, the Middle East and China is broadening our end market exposure and providing new opportunities. China and Brazil have had a very good start to the year and we are expecting good results in India and from the Middle East. The strong input expected in the first half will benefit margins in the second half as the revenue increases.

Rotork Gears

Our gears business continues to grow organically through incremental sales to the valve industry. We are focused on developing sales channels in fast-growing markets such as China, India and Russia and are experiencing success in winning new customers. We have also introduced a number of new gearbox products that are making encouraging progress and will benefit us towards the end of 2011 and into 2012. We remain focused on mitigating raw material cost increases however these activities may not benefit us in the current year as we may see slightly lower margin in this division.

Financial Position

The Group continues to be highly cash generative and maintains a strong balance sheet. This position supports our current trading and will allow us to take advantage of future opportunities.  Cash balances at the end of the quarter were £104m.  There have been no material events or transactions affecting the Group in the period.

Corporate activity

On 8 April we completed the acquisition of Rotork Servo Controls Mexico. This acquisition will allow the Group to develop its sales channels in Mexico and invest in its service solution.

Outlook

The record order intake and current activity levels in the markets that we serve give us confidence in making further progress in 2011.    

Notes

1.    First quarter refers to the period 1 January to 3 April 2011.

2.    2011 figures quoted are at actual exchange rates and 2010 are as previously reported.

3.    Rotork will be announcing its interim results for the period to 30 June 2011 on 2 August 2011.

For further information, please contact:

Rotork p.l.c.                                                       Tel: [phone]

Peter France, Chief Executive

Jonathan Davis, Finance Director

Financial Dynamics                                         Tel: [phone]

Nick Hasell / Richard Mountain

 

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